It is well known that existence of monopoly is accompanied by economic inefficiency in the form of dead weight loss and reduced consumer surplus. The consumer surplus that exists in case of perfect competition gets reduced in case of monopoly; as a part of it goes to the monopolist in the form...

We examine the impact of targeted advertising on competition and welfare when advertising directly affects the consumer’s utility, as in Becker and Murphy (1993). We show that as targeted advertising becomes less costly, market concentration and prices increase. Yet consumer welfare also...